21 During a typical month, a hotdog stand reports a profit of $9,000 with sales of...
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21 During a typical month, a hotdog stand reports a profit of $9,000 with sales of $50,000, fixed costs of $21,000, and variable costs of $0.64 per hot dog. Next year, the company plans to start selling nachos for $3 per unit. Nachos will have a variable cost of $0.72 and new equipment and personnel to produce nachos will increase monthly fixed costs by $8,808. Initial sales of nachos should total 5,000 units. Most of the nacho sales are anticipated to come from current hot dog purchasers, therefore, monthly sales of hot dogs are expected to decline to $20,000. After the first year of nacho sales, the company president believes that hot dog sales will increase to $33,750 a month and nacho sales will increase to 7,500 units a month. Determine the monthly breakeven sales in dollars before adding nachos. (5 Points) $20,000 $21,875 $29,808 $30,000 $35,000 22 Using the same information from Question 21, determine the monthly breakeven sales during the first year of nacho sales, assuming a constant sales mix of 1 hotdog and 2 units of nachos. (5 Points) 33,750 hot dogs + 22,500 nachos 33,750 nachos + 22,500 hot dogs 13,500 hot dogs + 5,400 nachos O 13,500 nachos +5,400 hot dogs 5,400 hot dogs + 10,800 nachos O5,400 nachos + 10,800 hot dogs 21 During a typical month, a hotdog stand reports a profit of $9,000 with sales of $50,000, fixed costs of $21,000, and variable costs of $0.64 per hot dog. Next year, the company plans to start selling nachos for $3 per unit. Nachos will have a variable cost of $0.72 and new equipment and personnel to produce nachos will increase monthly fixed costs by $8,808. Initial sales of nachos should total 5,000 units. Most of the nacho sales are anticipated to come from current hot dog purchasers, therefore, monthly sales of hot dogs are expected to decline to $20,000. After the first year of nacho sales, the company president believes that hot dog sales will increase to $33,750 a month and nacho sales will increase to 7,500 units a month. Determine the monthly breakeven sales in dollars before adding nachos. (5 Points) $20,000 $21,875 $29,808 $30,000 $35,000 22 Using the same information from Question 21, determine the monthly breakeven sales during the first year of nacho sales, assuming a constant sales mix of 1 hotdog and 2 units of nachos. (5 Points) 33,750 hot dogs + 22,500 nachos 33,750 nachos + 22,500 hot dogs 13,500 hot dogs + 5,400 nachos O 13,500 nachos +5,400 hot dogs 5,400 hot dogs + 10,800 nachos O5,400 nachos + 10,800 hot dogs
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Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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